Large Incentives Targetting Low-Income Households Bring Best Results

Canberra, ACT

Incentive programs to promote e-bike purchases should consider eligibility criteria that target assistance for lower income residents, and often need to be a significant sum to achieve broad behavioural changes, according to a US academic specialising in e-bike incentive schemes.

Speaking at a We Ride Australia webinar last month, graduate research assistant Cameron Bennett, from Portland State University, said the university’s research into the US’s 117 e-bike incentive schemes found income-tested incentives, with higher levels of assistance, were key to boost levels of e-bike use in communities.

They targeted people who were otherwise priced out of the e-bike market, while smaller incentives without restrictions on participants’ incomes tended to be a sweetener for people who quite likely would have bought an e-bike anyway.

“There’s a great portion of the population who’s already considering purchasing an e-bike and small incentive values typically go to those people for whom the incentive isn’t going to change their mind one way of the other, it’s just a nice little coupon on their purchase,” he explained.

Cameron was one of three guest speakers at the Creating Change Through E-Bike Incentives presentation, which was We Ride’s first webinar for the year and attracted 232 audience members, including a large contingent of government policy makers and advisors.

They also heard from Cycling UK’s deputy director of behaviour change, Jenny Box, about her organisation’s world-first Making Cycling E-asier scheme, and from a founder of the world’s largest e-cargo bike subscription service, Melbourne-based company Lug+Carrie.

Webinar convener Sam Johnson, a sustainable transport analyst at the World Bank, told the audience Cameron and his Portland university colleagues are attributed with providing some of the best profiling of the many e-bike incentive schemes operating in the US.

Cameron said as the US e-bike market continues to boom, with annual sales topping one million units in 2021 and outnumbering combined sales of electric cars, vans and trucks in his country, his team wanted to investigate how effective incentives could be in further boosting electric bicycle uptake.

“The question for us, as we see the booming popularity of these bikes, was how we can use price as a lever to bridge the chasm of adoption of these vehicles into a more mainstream form of transportation,” he said.

“To answer that question, we wanted to look at existing programs, their trends and figure out the best practice for those programs.”

He said their findings strongly supported the introduction of lower-income thresholds for assistance eligibility.

US programs with these thresholds – which represented only around a third of the schemes in that country – were typically based on US federal poverty guidelines, published annually by the Department of Health and Human Services, or on the median income for that city or region.

Case Studies

Cameron presented case studies on three exceptional incentive programs in the US and Canada: in the Oregon city of Corvallis, the Saanich municipality in British Columbia and Denver, Colorado.

All three have an income cap for eligibility or offered greater assistance for participants with lower incomes.

The Corvallis program is restricted to people making 80% or less of the area’s median income, “which we think is a really clean way to prioritise benefits to those who need them most”.

Similarly, the Saanich scheme used a targeted universalism approach with a range of assistance from the equivalent of A$400 up to A$2,000, depending on recipients’ incomes.

Analysis of the Denver program found recipients who qualified under the income threshold “were riding up to 50% more than their non-income qualified counterparts”.

In addition, 29% of recipients were new to bike riding and 71% were using internal combustion vehicles less as a result of purchasing an e-bike through the incentive program.

The university has used its research to produce a framework for developing incentive programs.

This framework, contained in a white paper released a year ago, offers guidance on a number of key aspects for incentive programs.

That includes achieving equity goals by providing flat rebate amounts – rather than scaling the assistance as a proportion of a bike’s purchase price.

Cameron said that flat dollar amount was more effective in helping people who couldn’t afford more expensive e-bikes.

“We like to see programs that don’t restrict purchases based on e-bike type. This provides for a larger variety of use cases and a larger variety of people who are going to use the bikes in different ways,” he added.

“In particular, we like to see commercial and cargo bikes included and often receiving additional incentives. These bikes in particular are really capable of replacing private vehicles, which tends to be the goal of these program.”

He said point of purchase rebates were also particularly effective in reducing barriers to e-bike purchases.

Making Cycling E-asier

Jenny said the Making Cycling E-asier program, borne out of the Covid pandemic, has set a goal to boost walking and cycling so they represented at least 50% of all journeys in UK cities and towns by 2030.

She told the webinar simplicity is essential for successful incentive campaigns.

“You need to have a simple offer that is clear and easy to understand. It needs to be really obvious who your audience is and who you’re trying to benefit and give most support to,” she explained.

“At Cycling UK, we really care about data and having the right processes in place to be able to deliver a program simply and with most impact.”

She also recommended working with local champions and ambassadors, “whether it’s with influencers or informally with people who just have really bought into the program and want to support it”.
Jenny said localised promotion and on-the-ground marketing partners were essential.

“Filling the promotional funnel and consistently having press coverage reaching millions of people is good, but that doesn’t automatically translate into millions of bookings,” she added.

“Working really hard on local promotion and marketing to reach the most people will see the most benefit from a program.”

Target Low-Hanging Fruit

Lug+Carrie founder Ben Carr advocated incentive programs that targetted early wins, to achieve weight of numbers and “normalise” micromobility as a form of transport.

“Australia is at an interesting point where the infrastructure’s coming along and a lot of people cycle. What Australia is missing in the normalisation of riding as a form of transport,” he told the webinar.

“We’re not at the pilot stage anymore. The missing part is normalisation and scale. Everything else is there, the bikes, the willingness of communities and now it’s about getting things up and running, and taking on the challenge of let’s get a big percentage of Australians cycling because that will normalise it for the rest of the community.

“Take those early wins because everyone else will learn from them. There will no longer be a question of why you rocked up to a restaurant with a helmet in your hand, people will just accept it.”

View a recording of the webinar.

A transcript of questions and answers from the webinar chat room can be viewed here.